Strong v. Repide
United States Supreme Court
213 U.S. 419 (1909)
Strong (plaintiff) owned stock in the Philippine Sugar Estates Development Company; Repide (defendant), a director owning roughly three-quarters of the company's stock and serving as its administrator general with exclusive management control, was personally negotiating a lucrative sale of company land to the Philippine government. While those negotiations were pending, Repide secretly hired a broker (who in turn hired another intermediary unaware Repide was the real buyer) to purchase Strong's stock, without disclosing the pending land sale; the sale went through soon after and increased the company's stock value tenfold. Strong sued to void the sale of her stock for fraud.
Whether, under the common law, a corporate officer with insider knowledge of facts affecting the value of the company's stock has a duty to disclose the facts before a stock transfer.